WILLOWGLEN MSC BERHAD ( WILLOWGLEN OR THE COMPANY ) PROPOSED BONUS ISSUE 1. INTRODUCTION

Transcription

1 WILLOWGLEN MSC BERHAD ( WILLOWGLEN OR THE COMPANY ) PROPOSED BONUS ISSUE 1. INTRODUCTION On behalf of the Board of Directors of Willowglen ( Board ), Mercury Securities Sdn Bhd ( Mercury Securities ) wishes to announce that the Company proposes to undertake a proposed bonus issue of 248,000,000 new ordinary shares in the Company ( Willowglen Shares or Shares ) ( Bonus Shares ) on the basis of 1 Bonus Share for every 1 existing Willowglen Share held on an entitlement date to be determined later ( Entitlement Date ) ( Proposed Bonus Issue ). 2. DETAILS OF THE PROPOSED BONUS ISSUE 2.1 Basis and number of Bonus Shares to be issued The Proposed Bonus Issue entails the issuance of 248,000,000 Bonus Shares on the basis of 1 Bonus Share for every 1 existing Willowglen Share held by the registered holders of Willowglen Shares ( Shareholders ) whose names must be registered in the Record of Depositors of the Company as at the close of business at 5.00 p.m. on the Entitlement Date in order to be entitled to the Bonus Shares ( Entitled Shareholders ). The Entitlement Date will be determined by the Board and announced at a later date after the receipt of all relevant approvals for the Proposed Bonus Issue. The Bonus Shares in respect of the Proposed Bonus Issue will be issued as fully paid at nil consideration and without capitalisation of the Company s reserves to reward the Shareholders for their loyalty and continuous support. The actual number of Bonus Shares to be issued will depend on the total number of issued Willowglen Shares on the Entitlement Date. As at 12 March 2018, being the latest practicable date prior to this announcement ( LPD ), the issued share capital of the Company is RM29,240,000 comprising 248,000,000 Willowglen Shares. In view of the entitlement basis above, there shall not be any fractional entitlements of the Bonus Shares arising from the Proposed Bonus Issue. The price of Willowglen Shares will be adjusted for the Proposed Bonus Issue. For illustrative purposes, based on the 3-month volume weighted average market price of Willowglen Shares up to and including 16 March 2018 (being the date immediately prior to this announcement) of RM1.2027, the theoretical ex-bonus price of Willowglen Shares is RM Further, the share price adjusted for the Proposed Bonus Issue is not less than RM0.50 based on the daily volume weighted average market price during the past 3-month period up to 16 March The Proposed Bonus Issue is not intended to be implemented in stages over a period of time. 2.2 Ranking of the Bonus Shares The Bonus Shares shall, upon allotment and issuance, rank pari passu in all respects with the existing Willowglen Shares save and except that the Bonus Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to the Shareholders, the entitlement date of which precedes the date of allotment and issuance of the Bonus Shares. 2.3 Listing and quotation for the Bonus Shares An application will be made for the listing and quotation for the Bonus Shares on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ). 1

2 The Bonus Shares will be listed and quoted on the Main Market of Bursa Securities on the next market day following the Entitlement Date. 2.4 Capitalisation of reserves For the avoidance of doubt, there shall not be any capitalisation of the Company s reserves pursuant to the Proposed Bonus Issue. Under the Companies Act, 2016 ( Act ) which came into effect on 31 January 2017 and which replaces the Companies Act, 1965, the concept of par value for shares of Malaysian companies has been abolished. Pursuant to the par value regime that was in force prior to the new Act, the Companies Act, 1965 had stipulated that shares may not be issued at a discount to their par value and an amount must be capitalised from retained earnings or reserves of a company and be transferred to the share capital account of a company in connection with an issuance of new shares. Under the new Act, such requirements are no longer applicable and there is no stipulation that cash consideration must be paid or transferred in connection with an issuance of new shares. As a result of this, a bonus issue can now be undertaken either:- by way of capitalisation from the share premium account or capital redemption reserves of a company (applicable only during the 24-month transitional period as stipulated under Section 618(3)(c) of the Act read together with Practice Note 1/2017 dated 8 February 2017 issued by the Companies Commission of Malaysia); or without capitalisation, in a manner akin to a subdivision of shares. In view of the above, the Board has resolved that the Bonus Shares shall be issued as fully paid shares at nil consideration and without capitalisation from the Company s reserves, in compliance with the provisions of the new Act. 3. RATIONALE FOR THE PROPOSED BONUS ISSUE The Board is of the view that the Proposed Bonus Issue is the most appropriate avenue of rewarding the Shareholders for their loyalty and continuous support while at the same time, enhancing the capital base of the Company as the Proposed Bonus Issue will:- increase the number of Shares held by the Shareholders while maintaining their percentage of equity interest in the Company; and improve the trading liquidity and marketability of the Willowglen Shares on the Main Market of Bursa Securities, thereby providing opportunity for greater participation from a broader range of investors. 4. USE OF PROCEEDS Willowglen will not receive any proceeds from the Proposed Bonus Issue as the Bonus Shares will be allotted and issued to the Entitled Shareholders at nil consideration. 2

3 5. EFFECTS OF THE PROPOSED BONUS ISSUE 5.1 Share capital The pro forma effect of the Proposed Bonus Issue on the issued share capital of the Company is as follows:- No. of Shares (1) Share capital (RM) Issued share capital as at the LPD 248,000,000 29,240,000 (2) To be issued pursuant to the Proposed Bonus Issue 248,000,000 - Issued share capital after the Proposed Bonus Issue 496,000,000 29,240,000 (2) (1) Including treasury shares. (2) Including RM4.44 million which was reclassified from share premium to share capital pursuant to Section 618(2) of the Act. 5.2 Net assets and gearing The Proposed Bonus Issue will not have any effect on the gearing of Willowglen and its subsidiaries ( Group ) as the Group does not have any borrowings as at the LPD. The pro forma effect of the Proposed Bonus Issue on the audited consolidated net assets of Willowglen as at 31 December 2016 is as follows:- (I) (II) Audited as at 31 December 2016 After subsequent events (1) After (I) and the Proposed Bonus Issue (RM 000) (RM 000) (RM 000) Share capital 24,800 29,240 29,240 Share premium 4, Retained earnings 99,902 95,035 94,915 (2) Other reserves 7,465 7,465 7,465 Net assets 136, , ,620 No. of Shares in issue 243, , ,653 (excluding treasury shares) ( 000) Net assets per Share (RM) (1) After adjusting for the following:- declaration of final single-tier dividend of 2 sen per Share for the financial year ended 2016 amounting to approximately RM4.87 million which was subsequently paid on 31 May 2017; and reclassification of RM4.44 million from share premium to share capital pursuant to Section 618(2) of the Act. (2) After deducting estimated expenses incidental to the Proposed Bonus Issue of approximately RM120,000. 3

4 5.3 Substantial Shareholders shareholdings The Proposed Bonus Issue will not have any effect on the percentage shareholdings of the substantial Shareholders in the Company as the Bonus Shares will be allotted and issued on a pro-rata basis to all the Shareholders. However, the number of Shares held by the substantial Shareholders in the Company will increase proportionately as a result of the Proposed Bonus Issue. The substantial Shareholders of the Company based on the Register of Substantial Shareholders as at the LPD and the pro forma effect of the Proposed Bonus Issue on their respective shareholdings are as follows:- Substantial Shareholders As at the LPD After the Proposed Bonus Issue Direct Indirect Direct Indirect No of Shares % (1) No of Shares % (1) No of Shares % (2) No of Shares % (2) New Advent Sdn Bhd 130,900, ,801, Wong Ah Chiew 1,500, ,336,907 (3) ,000, ,673,814 (3) Simon Wong Chu Keong ,900,607 (4) ,801,214 (4) OSK Technology Ventures Sdn Bhd 28,840, ,680, OSK Ventures International Berhad ,140,337 (5) ,280,674 (5) OSK Equity Holdings Sdn Bhd ,140,337 (6) ,280,674 (6) Tan Sri Ong Leong Wong Joo Hwa ,344,837 (7) ,689,674 (7) (1) Computed based on 243,326,600 Willowglen Shares (after excluding 4,673,400 treasury shares). (2) Computed based on 486,653,200 Willowglen Shares (after excluding 9,346,800 treasury shares) following the completion of the Proposed Bonus Issue. (3) Deemed interested through his interest in New Advent Sdn Bhd, Elegant Preference Sdn Bhd, Jian Qi Holdings Sdn Bhd, his spouse and son. (4) Deemed interested through his interest in New Advent Sdn Bhd. (5) Deemed interested through OSK Venture Equities Sdn Bhd and OSK Technology Ventures Sdn Bhd. (6) Deemed interested through OSK Ventures International Berhad. (7) Deemed interested through OSK Ventures International Berhad and Land Management Sdn Bhd. 4

5 5.4 Earnings and earnings per share The Proposed Bonus Issue is not expected to have any material effect on the earnings of the Group for the financial year ending 31 December However, assuming the earnings of the Group remain unchanged, the earnings per share of Willowglen will be proportionately diluted as a result of the increase in the number of Willowglen Shares arising from the Proposed Bonus Issue. 5.5 Convertible securities As at the LPD, the Company does not have any outstanding convertible securities. 6. APPROVALS REQUIRED The Proposed Bonus Issue is subject to approvals being obtained from the following:- (iii) Bursa Securities for the listing and quotation for the Bonus Shares to be issued pursuant to the Proposed Bonus Issue; the Shareholders at the forthcoming extraordinary general meeting of the Company to be convened; and any other authorities / parties, if required. The Proposed Bonus Issue is not conditional upon any other corporate exercise or scheme of the Company. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the Directors, major Shareholders and/or persons connected with them has any interest, direct or indirect, in the Proposed Bonus Issue, apart from their respective entitlements as shareholders of Willowglen under the Proposed Bonus Issue, of which all other Shareholders are similarly entitled to. 8. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposed Bonus Issue including but not limited to the rationale and effects of the Proposed Bonus Issue, is of the opinion that the Proposed Bonus Issue is in the best interests of the Company. 9. ADVISER Mercury Securities has been appointed as the Principal Adviser to the Company for the Proposed Bonus Issue. 10. ESTIMATED TIMEFRAME FOR APPLICATION TO AUTHORITIES AND COMPLETION The application for the listing and quotation of the Bonus Shares will be submitted to Bursa Securities on even date. Subject to all relevant approvals being obtained, the Proposed Bonus Issue is expected to be completed by the 2nd quarter of This announcement is dated 19 March